Lee Hardman, an analyst with MUFG in London, agrees that an August rate rise now looks less likely, which is why sterling has fallen.

He says (via Reuters)

“[The pound] is definitely trading on a softer footing after this news.

“For anyone who had any expectation of an August hike – that is clearly looking very unrealistic now, although he does reinforce that they are moving towards a hike. That will help keep alive expectations for a move later this year.”

Broadbent: I’m not ready to raise interest rates

There’s early drama in the markets today, as Bank of England deputy governor Ben Broadbent declares that he is not ready to vote to raise interest rates.

Speaking to the Press and Journal in Aberdeen, Broadbent declared that there are too many “imponderables” about the state of the UK economy.

And that makes it “very difficult” for the monetary policy committee to judge if business confidence is strong enough to support higher borrowing costs.

Here’s a flavour of the report:

Highlighting the “mood of business” as the key factor in his thinking, he said: “If you look at the past six to 12 months, economic growth has been okay and the employment rate good. Unemployment has drifted down a little … and inflation is higher.

“There is reason to see the committee moving in that direction (higher interest rates) – but there are still a lot of imponderables.”

It’s an important intervention. At least two Bank of England policymakers are likely to vote for a rate hike in August, so Broadbent is seen as one of the centrist voices who could swing the decision.

As Broadbent puts it:

“In my opinion, it is a bit tricky at the moment to make a decision (to raise rates). I am not ready to do it yet.”

Economists also expect that the UK unemployment rate will remain at 4.6% – the lowest in over four decades, with an extra 120,000 people joining the labour force.

That sounds like a strong labour market; but it simply isn’t feeding through to pay packets.

Overnight, ratings agency Moody’s warned that Britain’s economy will lose momentum this year amid squeezed living standards and uncertainty over Brexit.

There could be excitement in Canada too. The Bank of Canada is widely expected to raise interest rates today, for the first time in seven years.

And Federal Reserve chair Janet Yellen is testifying to the House Financial Services Committee, on the state of the US economy. She’s likely to stick to her position that the US economy is recovering, having raised interest rates last month.